I have to say that the previous post on our annual spending multiples has really put things into perspective. By the way, it also represents roughly the number of years we can last on the capital amounts of our savings and investments if both of us have to stop work involuntarily or by choice. The current rate of increase suggests our annual spending multiple should rise by 1x every year assuming there are no changes to our income and expenses. With the 10 year target to achieve financial independence, our annual spending multiple would have increased to 15x a decade later.
Our incomes might rise during that time as we hit our peak earning capabilities but our expenses would also increase correspondingly due to family obligations. Let’s say they net each other off i.e. back to the same scenario above of no changes. We would still get to the same annual spending multiple of 15x by then. Even if we both stop work at that time, we might have enough to get us to the retirement age to access our retirement funds. That’s when we get the next boost in our annual spending multiple from including these assets to last us to the end.
I’m hoping to accelerate the rate of increase of our annual spending multiple to either reach 15x before the 10 years are up or achieve 20x by the end of 10 years. I know the interest and dividend income will help but it still looks like our salary income is the main determinant. Which means the single biggest risk to us now is the loss of our jobs. How we manage that event if it happens will become the main factor that determines our ability to recover and get back on track. We don’t have any experience in dealing with retrenchment but we have some experience in managing my unemployment years ago. It’s not quite the same thing since the former is the cause (not the case in my situation) and the latter is the effect.
In our 6 years of working in Melbourne, Sydney and Singapore, learning how to deal with my unemployment after graduation remains our most important lesson as a working couple so far. Having to go through that at the start of our careers overseas has also shaped our work and relationship philosophies and dynamics greatly. These are some of the things we have learnt to better manage unemployment:
- Take care of your mental and physical health. Give yourself time to recover from the inevitable blow to your self-confidence and self-esteem. As long as it doesn’t cripple your mind, you live to fight another day. One of the best ways to do that is exercise even more often than you used to. Better mental and physical health will usually translate to stronger performance in interviews.
- Don’t just apply for jobs online at home the entire day. Get out of the apartment/house to meet your professional and social network. It will help you to feel better about yourself and you can access more opportunities that way. People are actually willing to help as long as you ask for it. Besides, there’s not that many relevant jobs posted online that will occupy your whole day to apply to them. Find and target roles that are not listed on job sites.
- Understand that your partner will feel the increased stress and pressure. Nobody like to be the sole breadwinner in a household if they had a choice. It’s stressful knowing that your loved ones rely heavily on your income to survive. Going from a dual-income to single-income household requires getting used to and your partner is going to be under pressure to perform better at work to keep the job. Expect him/her to lash out no matter how well both of you manage this transition.
- Work out whether the issue is a skills gap. Assess whether your job skills are sufficient and still relevant or no longer in demand. This is the time to decide whether you should keep sticking to your current field only to have the same problem later or move to a sustainable field with a brighter future. Be specific in your retraining and reskilling so you waste less of your dwindling time and energy reserves.
- Be prepared to cut fixed & non-discretionary expenses and accept a lower salary. You have to be ready to reduce all fixed & non-discretionary expenses. The longer you stay unemployed, the more drastic your measures will have to be. Chances are your next job will also have a lower salary because you are not in any position to negotiate for a higher pay. It’s desperate times once you have to start drawing on your emergency fund no matter how large it is.
- Communicate with your partner even more than you used to. It’s easy to forget your partner can be having a bad time at work when you are thinking he/she should be grateful to even have a job. Don’t shut down and go into your own world of thoughts and worries. This is the time for greater communication to avoid any misunderstandings and resentment.
- Find other ways to contribute to the household. Earning money to pay for stuff is only one way to contribute to the household. There’s so many other ways you can contribute if you don’t have an income such as doing the laundry, buying groceries, cooking, cleaning the apartment/house, paying the bills etc. This is on top of your job-hunting efforts since you still have to pull your weight at home.
Every now and then, we go through and survive retrenchment exercises and keep in contact with friends/ex-colleagues that are jobless. The tough times they face remind us of the hardships we went through and left behind but could be just around the corner for us again. It’s one of the reasons I started this blog. To develop a hobby or interest that can occupy my attention and thoughts when life gets difficult. I still remember being in the apartment by myself while my wife was out working and adjusting to her full-time role.
We had no family in Melbourne and most of our international friends went back to their home countries. It’s hard to relate to our local friends when you are the one without the requisite visa to allow you to work and you can’t stay with family to save costs. Plus 3 years at university just isn’t enough time to build good friendships when there’s so little common & shared experiences. It can get lonely & isolating and it would have been helpful to have a platform that I can share my thoughts and worries on. Not to say I wasn’t talking to my wife about it. She was already having a tough time at work with a difficult manager who didn’t particularly like an international student (with a lack of local work experience) in a graduate role.
This was on top of us screwing up our budget and not managing our expenses properly. My wife still had savings but I was running out of money even after transferring over most of my savings from Singapore. I sunk into a mild depression while my wife was trying to keep her head above water. You want to know where our perseverance and resilience came from? It’s from surviving shitty experiences like that. By the way, there are many people out there with much worse stories.
That’s how my wife and I learnt the most important thing about us – that ultimately, we can only depend on ourselves and each other. It’s okay to make mistakes as long as learn and move on from them. We believe strongly in helping our family and friends in times of need but we also actively encourage them to help themselves. We won’t apologise for the way we have developed and the values & ideas we stand for. Neither do we care much about how other people perceive us. This is just who we are now.